Analysis suggests most critical mineral demand stems from non-energy sectors

A new analysis by the Oakland Institute challenges the prevailing narrative that a massive expansion in mining is an unavoidable consequence of the global shift away from fossil fuels. By utilising data from the International Energy Agency, the report calculates that renewable energy infrastructure and electric vehicles accounted for only 26 per cent of the combined demand for copper, lithium, nickel, cobalt, graphite and magnet rare earths in 2024. The remaining 74 per cent of consumption was attributed to construction, conventional transport, industrial machinery, defence, electronics and other non-energy applications. This finding suggests that the current surge in mineral extraction is driven significantly by traditional industrial needs rather than solely by the energy transition.

The detailed breakdown reveals that sectors outside of renewable power and electric vehicles dominated demand for specific metals in 2024. Uses other than clean energy accounted for 83 per cent of nickel demand and 79 per cent of magnet rare-earth demand. Copper demand was 71 per cent non-energy related, while both cobalt and graphite saw 68 per cent of their consumption driven by industries such as construction and electronics. Specifically, the construction sector consumed 30 per cent of global copper, and stainless-steel production accounted for roughly two-thirds of global nickel usage. These figures indicate that the material footprint of the energy transition is smaller than often portrayed when viewed against the backdrop of broader industrial consumption.

Looking towards 2050, the International Energy Agency projects that the global fleet of battery-electric, plug-in hybrid and fuel-cell vehicles will increase from 11 million in 2020 to nearly two billion. Under this scenario, electric vehicles would consume 15.7 million metric tons of critical minerals, representing 23 per cent of the projected 68.2-million-ton combined total. However, research from the University of California, Davis, suggests that this demand could be significantly mitigated through design and policy changes. A study modelling four pathways to zero-emissions personal transportation in the United States found that combining lower vehicle ownership, smaller battery sizes and best-case recycling rates could reduce annual lithium demand in 2050 by as much as 92 per cent compared with the most resource-intensive scenarios.

Further modelling indicates that smaller electric vehicle batteries alone could reduce annual lithium demand for US light-duty vehicles by up to 42 per cent by 2050, even if car dependence remains high. The International Energy Agency estimates that rightsizing batteries, adopting alternative chemistries and expanding recycling could collectively reduce global lithium demand by 25 per cent in 2030 under its net-zero scenario. This reduction would save an amount of material roughly equivalent to current global lithium production. Additionally, recycled supplies could lower primary copper and cobalt requirements by 30 per cent by 2040, and primary lithium and nickel requirements by 15 per cent. Without such recycling and reuse measures, the mining investment required to meet projected demand would be one-third higher.

Despite these potential efficiencies, US government policy continues to prioritise increased mineral production for reasons extending beyond clean energy. At the February 2026 Critical Minerals Ministerial, officials highlighted missile defence systems, artificial intelligence, advanced manufacturing and economic security as key drivers. Vice President JD Vance proposed a preferential trading bloc using price floors and adjustable tariffs, while other administration officials promoted federal loans, equity investments and mineral stockpiles. Notably, renewable energy and decarbonization were absent from the opening remarks, reflecting a broader strategic focus on defence and technological competition.

The US International Development Finance Corporation recently closed a $600-million investment in a $1.8-billion consortium established to finance critical-mineral projects. The corporation also reported that Congo’s state-owned mining company had sold and begun shipping approximately 100,000 tons of copper committed to the United States, with another 50,000 tons planned for Saudi Arabia and the United Arab Emirates. Tom Moerenhout, an adjunct associate professor at Columbia University’s School of International and Public Affairs, noted that the administration’s priority for mineral security remains unchanged, driven by defence procurement, artificial intelligence, manufacturing and competition with China.

However, the expansion of mining faces significant geographical and political challenges. A study published in Nature Sustainability mapped 5,097 current and prospective projects containing energy-transition minerals. It found that 54 per cent of these projects are located on or within 10 kilometres of Indigenous peoples’ land, while 33 per cent are on or within 10 kilometres of peasant land. This highlights the potential for conflict between resource extraction and recognised land rights. While the United Nations Conference on Trade and Development states that 250 new mines are needed to meet emissions targets, the Oakland Institute’s analysis underscores that most current demand for these metals originates from industries outside the renewable power and electric vehicle sectors.

The International Energy Agency expects clean-energy technologies to account for much of the subsequent growth in mineral demand, with demand nearly tripling between 2023 and 2030 under its Net Zero Emissions Scenario. Under the less demanding Announced Pledges Scenario, anticipated mine supply from existing and highly likely projects would meet 70 per cent of copper demand and 50 per cent of lithium demand in 2035. Nevertheless, the data suggests that the advertised need for hundreds of new mines is not simply the material cost of replacing fossil fuels, but includes minerals for weapons, data centres, construction and conventional industry, as well as the expansion of the global electric vehicle fleet.